Federal Incentives for Hydropower

DOE HYDROELECTRIC INCENTIVES PROGRAM

The Hydroelectric Incentives Program is focused on maintaining and enhancing hydroelectric facilities, while improving dam safety and reducing environmental impacts. On March 14, 2024 the U.S. Department of Energy opened the application period for the Hydroelectric Production Incentive, part of the Hydroelectric Incentives Program, which supports the modernization and expansion of hydroelectric power in the U.S. Currently, less than 3% of the nation’s multi-purpose dams are also used to generate electricity. Originally started in 2014 and expanded under the Biden-Harris Administration, the Hydroelectric Production Incentives provide payments for energy generated and sold during a calendar year at qualified facilities that either added generation equipment to dams and other water infrastructure or are constructed in an area with inadequate electric service. Applications are due for electricity generated and sold in year 2023 are due by 5:00 pm ET on April 23, 2024. Applicants may apply through the Clean Energy Infrastructure Funding Opportunity Exchange. In October 2023, DOE announced 66 hydroelectric facilities throughout the country will receive more than $36.7 million in incentive payments for electricity generated and sold in calendar years 2021 and 2022.

Other program offerings under the Hydroelectric Incentives Program are the Hydroelectric Efficiency Improvement Incentives and Maintaining & Enhancing Hydroelectricity Incentives. [1]

RURAL ENERGY FOR AMERICA PROGRAM (REAP)

REAP  provides loans and grants for the purchase and installation of hydropower below 30 megawatts or ocean (tidal, current, thermal) power generation. REAP provides funding to agricultural producers and rural small businesses for  small hydropower and other renewable energy systems or to make energy efficiency improvements. Projects must be located in rural areas with populations of 50,000 residents or less. Small businesses must be one of the following:

• Private for-profit entity (sole Proprietorship, Partnership, or Corporation)
• A Cooperative [including those qualified under Section 501(c)(12) of IRS Code]
• An electric utility (including a Tribal or governmental electric utility) that provides service to rural consumers and operates independent of direct government control)
• A Tribal corporation or other Tribal business entities that are chartered under Section 17 of the Indian Reorganization Act (25 USC 477) or have similar structures and relationships with their Tribal entity without regard to the resources of the Tribal government.
• Must meet the Small Business Administration size standards in accordance with 13 CFR 121. [2]

Applications and instructions are available here. REAP 2024 Application Windows:

• March 31, 2024
• June 30, 2024
• September 30, 2024

Updated by Tina Allen, March 2024